Abhi
Here is a simple compound interest calculator to find out the interest you receive in Rupees. This is tailored for Indians to calculate the returns on investments in India on a recurring and compounding basis.
How to calculate Compound Interest Online
This calculator is pretty straight forward. Here are the elements used to calculate your interest and what values you need to enter in them to find out your interest.
Principal
This is the amount of money in Indian Rupees(INR) you are investing on which you are expecting a return on
Duration
This is how long you are making this investment or deposit for. Mention this as years. Eg: If you are investing for 6 months, mention 0.5 as the duration of investment
Interest Payout Cycle
How often is the interest paid out. This can be weekly, forthnightly, monthly, quarterly, half-yearly or annually.
Rate of Interest
What is the % rate of interest that will be paid on this investment.
Frequency of Interest
The rate of interest you selected, is it monthly or annual interest. Eg: if 5%, is it 5% per month or 5% per year
FAQs about Compound Interest
A = P(1+r/n)nt
Here: A = the final amount you receive after maturity
P = principal or initial amount of money you invested
r = rate of interest you are getting on the investment
n = frequency of interest payout
t = duration of the investment
Investments on Simple interest earn fixed rate of interest and the interest earned does not generate further interest. Eg: In compound interest, for Rs.10,000 loan at 1% per month, the first month, interest is Rs.100, second month interest will be Rs.101. Rs.100 for the initial investment of Rs.10,000 and another Rs.1 as 1% interest on Rs.100 interest earned from the previous month.
In Simple interest, for the same scenario, every month, you earn Rs.100 that accumulates till maturity
Compound interest is better as it has a higher rate of return and will give you more money. Refer to example above.
Both are the same, compound interests are recurring in nature till maturity.
